Great blog posts about macroeconomics

The Legal Sports Gambling Industry: It’s Time to Wet the Beak

From the 1919 Chicago Black Sox to Tim Donaghy in 2007, sports gambling scandals have persisted throughout the years. Scandals like the aforementioned are always brought to light when trying to keep sports gambling illegal, however I do not think that they help the case necessarily. The constant theme between these two sports wagering scandals in particular is one thing: these players and referee were making nearly no money.

In today’s day and age, where sports are a billion dollar industry in the United States, it makes no sense why there should not be a push to legalize sports betting. The 1919 Chicago Black Sox were making between $37,000 to $74,000 annually in 2009 USD, whereas the average MLB player in 2009 was making $3 Million USD. Considering the low wages that the Chicago Black Sox-keep in mind they were found not guilty of all charges by a jury- were making it makes much more sense why they would be found throwing a game; they needed the money.

Lastly, there is Tim Donaghy. Tim Donaghy was an NBA official for thirteen years before he admitted to being involved in a sports betting scandal in 2007 that shocked the basketball world. The average NBA official makes roughly $150,000 a year. Now this is a staggering amount of money, but when you have cry-babies like Lebron James in your ear half of the games that you officiate, while he is making $30 million a year, you could be looking for other avenues to get a pay raise.

I mention these statistics because it can make sense why these three different scandals may have happened. In these three situations, these three people may have felt pressure to take the money because they felt they deserved it as they werent getting paid enough. The Chicago Black Sox scandal speaks for itself, as baseball was not the sport that it was even in the 1970’s and it was hard for them to make money, so they were going to take a little extra where they could. Additionally, Tim Donaghy was seeing all of the players he was officiating, and making chump change compared to what the players were, and felt his job rivaled theirs in difficulty, so he was looking for some extra money.

Legalized sports gambling could help to take care of these problems. Most of the time when someone knows that there is a points shaving scandal out there, it is in the best interest of illegal book makers to spot it. However, they cannot inform the authorities because obviously what they were doing is illegal. That would be like trying to tell the cops you drug dealer did not in fact sell you marijuanna, but instead it was oregano. If it were legal, point shaving scandals could be pointed out much easier, and it could help in making the game much more honest, especially in situations where the players are making astronomical amounts of money in the big four American sports (NFL, NBA, MLB, NHL).

In addition to helping the integrity of the games, it could help increase revenues for each and every big time sport in the United States. The global gaming research firm GamblingCompliance has researched this topic endlessly, and projects that if gambling was legalized, it could generate up to $12.4 billion in revenue annually. For reference the NFL in 2015 made roughly $12 billion in revenue, as the largest sports league in the United States. Any time a wager was placed on a team, the league would be able to see a share in that money; and who doesn’t want more money. Increased revenues for all teams in the big four sports is something that I am sure they would love, and would help to attract more viewers to the sport, either for the love of the game or for the love of making money.

With only 40% of all wagers on sports coming legally, it is not in the best interest of these sports teams to oppose gambling anymore. With the size and focus that there is on the sports industry, it would only help their cause in growing and sharing sports to legalize gambling, and let the different leagues that are gambled upon “wet the beak” and take some of that money with that in order to increase revenues. By going through Congress, and having a very specific plan according to how legalized sports betting could work, the big four sports leagues in the United States could profit massively.

Interesting take on this subject. I agree that there is less of a chance of a loss of integrity in the sport due to gambling in today’s sports industry, and either way points shaving scandals will occur to some extent. Interesting time to be thinking about this. I am wondering how the Raider’s move to Las Vegas could affect this debate.

Thats amazing that sports gambling could generate more revenue than the NFL! I wonder how the growth of sports “skills” (but really gambling) sites like Fanduel and Draftkings could effect the potential push for legalization of sports gambling? Maybe these apps will draw more attention to formal sports gambling in the event it gets legalized?

Very interesting topic. I totally agree that we take away from GDP when illegal bets account for way what I believe is much more than $12.4B. It would be interesting to see whether today’s Congress would be more inclined to overturn the Professional and Amateur Sports Protection Act than the Congress of 1992. Furthermore, maybe just allowing betting on professional sports (where athletes are already paid) might be more ethical than betting on college sports.

Very interesting topic, and I agree with the fact that legalizing sports betting could be very beneficial to the GDP as well as keeping the integrity of the game. As the NBA playoffs are just beginning it’s very interesting to see how sports betting will be played out especially during the finals.

PAPSA will be overturned when the sports leagues lobby together to get it overturned. That being said, the NCAA will never be ok with sports gambling. The major pro sports don’t need to worry about athletes throwing games because they are way too well paid to risk even an NBA or NFL minimum salary to make something on the side illegally.

However, given the way the NCAA rips off (at least the top) athletes by requiring them to play for nothing, those same safeguards are not in place for the college game.